Compliance|Fair Corporate Activities and Respect for Human Rights|Initiatives to Address ESG Issues|SECOM: SECOM CO., LTD. provides crime-prevention, security, and home security -Providing society with trusted peace of mind-

Compliance

Basic policies and structure

Basic concepts and policies

SECOM is engaged in the security services business, whose objective is to protect the lives and assets of our customers from legal violations or malfeasance by third parties. We therefore recognize the importance of sincerely executing duties to earn the trust of our customers and society as a whole. To this end, we have formulated the SECOM Group Code of Employee Conduct, which prescribes ideals covering all situations, both official and private, as well as specific behavioral criteria to be followed by all executives and employees as they perform their daily duties. We take advantage of various opportunities to promote the thorough observance of this code.

A major feature of the security services business is that the employees who provide services are in the position of regulating others. Accordingly, employees in the position of regulating others must also restrain themselves and obey the law, as well as the spirit thereof, while executing their duties with sincerity. This is how we earn the trust of our customers, which serves as the foundation of the security services business. Therefore, as part of our basic policy, SECOM constantly strives to systematically ensure that each employee engages in thorough compliance with the law and the spirit thereof, which has led to our growth until today.

Ensuring compliance in business activities

Structure

SECOM views compliance as encompassing not only the observance of laws, regulations, and the Articles of Incorporation but also operating in a manner that strictly adheres to the spirit thereof. Accordingly, compliance forms an integral component of our daily operations. Each and every employee is on the front line of promoting our code of conduct, including compliance, with direction from the individuals in charge of each department. Each department is overseen by the responsible Executive Officers, while the President and Representative Director has jurisdiction over the entire company.

Executive Officers analyze and assess business risks and fraud risks annually in the business areas for which they are responsible. They report their findings to the President and Representative Director and the Audit and Supervisory Board Members, review as appropriate internal rules and various manuals, and make appropriate revisions, as necessary.

Organizational management emphasizing compliance

Historical background and path until today

SECOM was established in 1962 as Japan’s first security services provider. In order to establish a security services business, the objective of which is to protect the lives and assets of our customers from legal violations or malfeasance by third parties, it has been essential for SECOM since our founding to obey the Japanese Constitution and related laws, as well as to comply with the spirit of the law.

There are examples in which the response of employees to customers has improved the reputation of a company. Moreover, a major feature of the security services business is that the employees who provide services are in the position of regulating others.

Consequently, it goes without saying that employees in the position of regulating others must also discipline themselves and obey the law, as well as the spirit thereof, while executing their duties with sincerity. This self-discipline is essential to obtaining the trust of customers, serving as the foundation of the security services business.

For that reason, as a part of our basic policy, SECOM constantly strives to systematically ensure that each employee engages in thorough compliance with the law and the spirit thereof.

Specifically, we provide an employee pocketbook which summarizes the appropriate attitude as a SECOM employee and behavioral criteria. The rules in this pocketbook are even stricter than the general provisions of the law, and are formulated so that all employees can feel pride in their work. We require all executives and employees to always keep the pocketbook together with their ID cards at work, and as the core of organizational management, we strive to link these rules with all activities at our company to ensure their thorough implementation.

In recent years, the globalization of Japanese society and the changes in social structure have created the need for new laws and the strong demand to engage in compliance. As explained above, SECOM has engaged in organizational operation that prioritizes compliance since our founding.

SECOM Group Code of Employee Conduct

The appropriate attitude and behavioral criteria as a SECOM employee summarized in the employee pocketbook were formulated in accordance with the basic philosophy defined at the time of SECOM’s founding. Together with “SECOM’s Principles” and “The Constitutions of SECOM Group in Business and Management,” the content of the pocketbook is universal and appropriate for any era from the perspective of compliance. However, with the expansion of our business areas and the need of clear understanding among all positions and all employees within the Group, on December 1, 2006, we added specific supplementary content including responses to new laws and changed the title of the employee pocketbook to establish the SECOM Group Code of Employee Conduct.

While the original employee pocketbook served as a moral support for all SECOM employees, the attitude as SECOM Group employees and ways of thinking with regards to compliance, as the base of our business, are thoroughly promoted with the SECOM Group Code of Employee Conduct.

In addition, the SECOM Group Code of Employee Conduct clearly defines specific behavioral criteria and corporate ethics which must be followed by executives and employees during relationships with stakeholders such as the community, customers, or suppliers. To support these criteria and ethics, we have also defined a code of conduct related to cutting off relationships with anti-social forces, prohibiting corruption and bribery, and complying with related laws.

For example, our code of conduct includes: “employees must not engage in personal transactions or money lending with customers or business partners,” “employees must not accept personal gifts from customers or business partners,” “employees must constantly maintain healthy and transparent relationships with government agencies or political organizations, and must never engage in any behavior which may generate misunderstanding in regards to bribery,” and “employees must maintain moderation and dignity when providing gifts to customers, and must keep gifts within the appropriate scope to prevent any unnecessary understandings.”

As a result of these ongoing efforts, there were no cases of legal action or prosecution for bribery in fiscal 2019.

Role of internal audit departments

On orders from the President and Representative Director, duties of the internal audit departments (the Internal Audit and Compliance Department and the Group Governance Department) include inspecting each organization and department of SECOM CO., LTD. and its subsidiaries, encouraging compliance with the laws and the SECOM Group Code of Employee Conduct to improve morale, and providing guidance for items requiring correction. The results of inspection are reported to the President and Representative Director and other relevant Executive Officers.

Furthermore, when reports and consultations are received from SECOM Group employees through the whistle-blowing system that is explained below, the internal audit departments make reports immediately to the relevant Executive Officers. While giving top priority to preventing any disadvantage to the whistle-blower, the necessary investigations are conducted in accordance with methods decided upon by the Executive Officers.

As a matter of course, in regards to important issues, direct instructions must be asked from the President and Representative Director and other relevant Executive Officers, and reports must be made to Audit and Supervisory Board Members from the internal audit departments.

Whistle-blowing system

The SECOM Group Code of Employee Conduct requires the SECOM Group employees to report to the appropriate supervisor upon discovering that an employee, an executive, or an official at a subcontractor is attempting to engage or has engaged in an action that will cause the Company to lose the society’s trust, including violation of the code. For cases in which it is difficult to make a report to the supervisor for some reason, we have established the whistle-blowing system for the SECOM Group employees; the Hot Helpline, to report to the Internal Audit and Compliance Department, and the Group Head Office Helpline, to report to the Group Governance Department.

The whistle-blower’s name and the content of the report are kept confidential. As long as the whistle-blower made the report in good faith, the whistle-blower will not suffer any disadvantage, even if the content of the report differ from actual conditions.

According on the results of investigations, the relevant Executive Officers are obligated to immediately take corrective measures and find a solution. In accordance with instructions from the Executive Officer, the staff in charge of the investigations notifies the whistle-blower of the contents and results of the investigation confidentially.

Organizational Culture Committee

Unless constant effort is made to improve and strengthen, the corporate organization will inevitably deteriorate. An important criterion for assessing the state of an organization is the organizational culture of the company.

The Organizational Culture Committee was established as a standing committee chaired by the President and Representative Director to achieve further growth of the SECOM Group. The committee examines important organizational culture-related issues and decides important official commendations and punishments.

Also, in regards to the status of implementation for the SECOM Group Code of Employee Conduct as well as legal compliance, the Organizational Culture Committee deliberates on items reported to the President and Representative Director from the Internal Audit and Compliance Department and the Executive Officer in charge. If necessary, the committee examines proposals for reviewing the management system for the implementation of compliance and proposals for revising the SECOM Group Code of Employee Conduct made by Executive Officers.

Any changes to the SECOM Group Code of Employee Conduct and the management system for implementation thereof must be deliberated by the Organizational Culture Committee and resolved at the meeting of the Board of Directors at SECOM CO., LTD., after receiving opinions from the Audit and Supervisory Board Members.

Initiatives to prevent corruption

As part of our initiatives to prevent corruption, we have created a robust internal control system and defined accounting procedures to stop inappropriate payments, and we thoroughly ensure the accuracy of account books and other records. Furthermore, internal audit departments perform regular internal audits to improve employees’ awareness of preventing corruption, avoid fraudulent practices, and monitor compliance with laws, regulations, and internal rules for preventing corruption. If concerns are found, we immediately investigate and take appropriate action, while continuing to monitor the situation until such concerns are resolved.

We also conduct due diligence* to confirm in advance matters related to potential corporate acquisitions.

  • Due diligence: Detailed investigation of potential M&A candidates

Tax initiatives

The SECOM Group strives to maintain and enhance tax compliance, pay taxes appropriately, and fulfill its corporate social responsibility in accordance with international rules and the tax laws of countries and regions where it operates.

The SECOM Group’s Tax Initiatives(PDF 36KB)

The SECOM Group files tax returns in Japan and various foreign jurisdictions. In Japan, SECOM CO., LTD., the company with the largest tax payments within the Group, is no longer subject to regular income tax examinations by the tax authorities for fiscal years up to fiscal 2018. In foreign tax jurisdictions, major consolidated subsidiaries are no longer subject to income tax examinations by the tax authorities for fiscal years up to fiscal 2018, with some exceptions.

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Compliance. This page introduces SECOM’s sustainability initiatives. Since our founding, SECOM, recognizing “the importance of mutual sustainable growth for corporations and society,” has worked to solve social/environmental issues through our business activities in terms of the economy, environment, and society.